Steel Tariffs Cost Caterpillar $70 Million in First Quarter

Caterpillar manufacturing costs escalated in first quarter by $375 million compared to a year ago on higher steel prices, freight and variable labor costs.

“These higher costs, while unfavorable, were improved from the fourth quarter levels. Material costs included a direct tariff expense in the first quarter of about $70 million, in line with what we expected,” said CFO Andrew Bonfield during the company’s first quarter 2019 earnings call. “Remember tariffs only started in July of last year, so these will have an impact in Q1 and Q2 until we are past their original implementation date.”